Neil Mendoza acted for the Defendant in successfully opposing a claim for specific performance and in restricting the Claimants’ claim to merely nominal damages. Further, in circumstances where the Defendant had made a Part 36 offer that the Claimants failed to beat, there were obvious cost consequences that flowed from what was effectively a substantial victory for the Defendant in fighting off the claim. The Claimants had initially asserted that their losses were £2,000,000. They were awarded damages of £1.
The Defendant had purchased a development site from the Claimants with the benefit of planning permission for the construction of 20 residential dwellings. In the Transfer, the purchaser covenanted to procure the adoption of the estate roads as public highways. However, the Local Highways Authority refused to adopt the roads and made it clear that they would not do so. The Claimants issued proceedings based on breach of that covenant seeking specific performance of the covenant and damages (either in lieu of specific performance or at common law for breach of covenant). They contended that the lack of adoption caused diminution in value of their retained land and which they also intended to develop.
The Defendant maintained from the outset that due to the stance of the Local Highways Authority, compliance with the covenant was not possible and that specific performance was not available as a remedy even if there was a breach of covenant. As to damages, if specific performance was not available, damages in lieu of such an order was similarly not available; as regards common law damages for breach of covenant, the Defendant’s position was that damages were no more than nominal. The Defendant was entirely successful in this argument.
In her judgment, HHJ Claire Jackson (sitting as a High Court Judge in the Business and Property Courts in Newcastle-upon-Tyne) reviewed the authorities relating to specific performance of contractual obligations where such performance was impossible and the point in time at which such impossibility was to be considered and assessed. The judgment also highlighted the dangers of an expert failing to act impartially so as to assist the Court. The Claimants relied on an expert who, following cross-examination, was found to have a lack of impartiality and fell into advocating for his client; the expert’s evidence was wholly rejected by the Judge who, after reviewing the role and duties of an expert, and most unusually, went as far as revoking the permission granted to the Claimants to rely on the report and evidence of that expert.
Neil was instructed by David Hacker of Thackray William LLP of Bromley, BR1 1DE
A link to the judgement can be found here
To learn more about Neil’s practice, please click here https://www.selbornechambers.co.uk/barrister/neil-mendoza/
